It's official: Telstra to snap up KAZ

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Telstra has announced plans to acquire 100 percent of KAZ Group, in a deal that values the Australian outsourcing and IT services company at $333 million.

In a statement issued to the ASX on Wednesday morning, both companies said the plan had been endorsed by KAZ directors and would involve Telstra paying 40 cents per share in cash via a scheme of arrangement.

KAZ boss Peter Kazacos would continue to lead the company as a stand-alone operation, according to Telstra business and government group MD David Thodey.

"Our intention is to operate KAZ as a stand-alone ICT business of sufficient scale to create a powerful force in the ICT marketplace," he said.

Telstra CEO Ziggy Switkowski, said the acquisition positions Telstra well in the managed services and ICT markets by expanding the Telco's IT services capability.

"For Telstra, the transaction delivers increased capability in the ICT services market, a key driver of future growth for Telstra's business and government division by enabling us to serve an increasing number of customers who are looking to telecommunications companies as partners who deliver and manage their complex IT and business process outsourcing requirements," he said in a statement.

The companies' combined managed services activities would have initial revenues close to $1 billion per year.

The offer price represents a 21 percent premium to the volume weighted average share price of 33.2 cents since the announcement of KAZ's half year result on 24 February.

Lyndsey Cattermole and Peter Draney, who are KAZ directors and together own 12 percent of the shares, agreed to grant Telstra a call option over their respective shareholdings.

The acquisition is subject to shareholder and court approval. It was expected that scheme documents would be sent to shareholders in late May and that shareholders would have the opportunity to vote on the scheme in late June.

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